GREE, Inc.

FY2024 First Quarter Financial Results

November 2, 2023

Copyright © GREE, Inc. All Rights Reserved.

Executive Summary

FY24 1Q

Financial Results

Overview

(Consolidated)

Game and

Overview

Anime

Metaverse

Operational

DX

Commerce

Investment

Notes:

  • DX = Digital Transformation
  • Net sales ¥15.8 billion, operating income ¥1.2 billion, EBITDA ¥1.3 billion
    • The Metaverse Business remained strong, consolidated operating income was in line with our forecast
  • Successful 1.5yr anniversary event for Heaven Burns Red
    • Net sales ¥11.7 billion (QoQ -¥1.1billion), operating income ¥1.6 billion (QoQ -¥0.5billion)
  • Growth in Platform Business and successful revamping of earnings structure
    • Net sales ¥2.0 billion (QoQ +¥0.1 billion), operating income ¥0.1 billion (QoQ +¥0.4 billion)
  • Improved profitability in the Marketing DX Business
    • Net sales ¥1.3 billion (QoQ +¥0.0 billion), operating income ¥0.2 billion (QoQ -¥0.0billion)
  • Continued stable growth, especially from aumo, Inc.
    • Net sales ¥0.3 billion (QoQ +¥0.0 billion), operating income ¥0.0 billion (QoQ +¥0.0 billion)
  • Although there were no major distributions, continued stable investment and accumulated investment assets
    • Net sales ¥0.6 billion (QoQ -¥3.5billion), operating income -¥0.2 billion (QoQ -¥3.6billion)

2

Copyright © GREE, Inc. All Rights Reserved.

Contents

  1. Financial Results Overview
  2. Operational Overview
  3. Appendix

Copyright © GREE, Inc. All Rights Reserved.

Contents

  1. Financial Results Overview
  2. Operational Overview
  3. Appendix

Copyright © GREE, Inc. All Rights Reserved.

1. Financial Results Overview (Consolidated)

FY24 1Q Financial Results Overview

Net sales ¥15.8 billion, operating income ¥1.2 billion, EBITDA ¥1.3 billion

FY24

1Q

QoQ

YoY

Net sales

15.79

-4.33

-22%

-0.80

-5%

Operating

1.23

-3.73

-75%

-0.36

-23%

income

Ordinary

1.57

-4.09

-72%

-0.86

-35%

income

Net income

1.18

-3.93

-77%

-0.63

-35%

EBITDA

1.34

-3.73

-74%

-0.32

-19%

Notes:

  • Net income: Profit attributable to shareholders of parent
  • EBITDA = Operating income/loss + depreciation costs + amortization of goodwill

Billions of yen

FY23

FY23

4Q

1Q

  1. 16.59
  1. 1.58

5.66 2.43

5.11 1.81

5.06 1.65

5

Copyright © GREE, Inc. All Rights Reserved.

1. Financial Results Overview (Consolidated)

Net Sales and Operating Income

Sales and income down QoQ due to the absence of contribution from the Investment Business

in the previous quarter

Billions of yen

22.15

20.12

16.59

16.58

24.6%

15.79

9.5%

10.5%

19.1%

4.96

7.8%

4.22

1.58

1.73

1.23

1Q

2Q

3Q

4Q

FY23

Consolidated net sales

Net sales

(excluding Investment Business)

(Investment Business)

1Q

FY24

Consolidated operating income

Operating income

Consolidated operating income margin

(excluding Investment Business)

(Investment Business)

6

Copyright © GREE, Inc. All Rights Reserved.

1. Financial Results Overview (Consolidated)

Sales and Operating Income by Segment

FY23

FY24

1Q

2Q

3Q

4Q

1Q

Game and

Sales

12.88

12.16

15.85

12.77

11.72

Anime

1.88

1.65

2.06

2.06

income

1.56

Operating

Metaverse

Sales

1.69

1.64

1.52

1.82

1.96

Operating

0.13

0.01

-0.24

-0.24

0.12

income

DX

Sales

1.29

1.46

1.44

1.25

1.30

Operating

0.25

0.28

0.32

0.18

0.18

income

Commerce

Sales

0.35

0.33

0.31

0.29

0.31

Operating

0.01

0.00

-0.00

-0.01

0.01

income

Investment

Sales

0.46

1.05

3.11

4.09

0.56

Operating

-0.19

0.24

2.42

3.41

-0.16

income

Consolidated

Sales

16.59

16.58

22.15

20.12

15.79

income

1.58

1.73

4.22

4.96

1.23

(including adjustments)

Operating

Notes:

  • Changes in reportable segments are reflected in past FY figures

Billions of yen

QoQ

YoY

-1.05

-8%

-1.17

-9%

-0.49

-24%

-0.31

-17%

0.15

+8%

0.28

+16%

0.36

---

-0.02

-11%

0.05

+4%

0.01

+1%

-0.00

-1%

-0.07

-27%

0.02

+7%

-0.04

-11%

0.02

---

0.00

+22%

-3.53

-86%

0.10

+22%

-3.57

-105%

0.04

---

-4.33

-22%

-0.80

-5%

-3.73

-75%

-0.36

-23%

7

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1. Financial Results Overview (Consolidated)

1Q Operating Income Analysis

Sales and income down QoQ due to the absence of contribution from the Investment Business

in the previous quarter, resulting in operating income of ¥1.2 billion

Billions of yen

¥3.73bn

decrease

4.96 -4.33

＋0.84

-0.24

1.23

Operating

Increase in

Operating

income

Sales decline

Decrease in

fixed costs

income

FY23 4Q

variable costs

FY24 1Q

8

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1. Financial Results Overview (Consolidated)

1Q Cost Structure

Total costs declined by ¥0.6bn to ¥14.6bn due to lower variable costs (especially advertising costs)

Billions of yen

FY24

Factors in change（QoQ）

FY24

FY23

1Q

QoQ

YoY

4Q

1Q

Advertising

1.01

-0.35

-0.27

Decrease on winding down of promotions for Heaven Burns Red

1.36

1.28

Commission fees, etc.

4.49

-0.56

-0.46

Decrease due to lower sales

5.05

4.94

0.43

0.06

0.08

0.37

0.35

Other

-

Total variable costs

5.93

-0.84

-0.64

6.77

6.57

Labor costs

3.69

0.26

0.22

Allocation of human resources to growth businesses, impact of bonuses, etc.

3.43

3.47

0.58

0.01

-0.04

0.57

0.61

Rental costs

-

Depreciation

0.11

0.01

0.04

-

0.11

0.07

Goodwill amortization

-

-

-

-

-

-

4.25

-0.03

-0.02

4.28

4.28

Other

-

Total fixed costs

8.64

0.24

0.20

8.39

8.44

Total costs

14.56

-0.60

-0.44

15.16

15.01

Notes:

9

● Breakdown of 1Q FY24 commission fees, etc.: commission fees: ¥2.99 billion, royalties: ¥1.49 billion

Copyright © GREE, Inc. All Rights Reserved.

Contents

  1. Financial Results Overview
  2. Operational Overview
  3. Appendix

Copyright © GREE, Inc. All Rights Reserved.

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Gree Inc. published this content on 02 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 November 2023 06:02:52 UTC.